Tom and RoseMary Own a Cabin near Stowe, Vermont

Multiple Choice

Tom and RoseMary own a cabin near Stowe, Vermont. During the current year the cabin is rented for 31 days for $1,800. Tom and RoseMary used the cabin a total of 12 days during the year. After making the appropriate allocation of expenses between personal and rental use, the following rental loss was determined: How should Tom and RoseMary report the rental income and expenses for the current year?

A) Include the $1,700 in gross income, but no deductions are allowed.
B) Report the $300 loss for AGI.
C) Only expenses up to the amount of $1,700 rental income may be deducted in the current year.
D) Report the interest $950) and taxes $150) as itemized deductions and the other expenses for AGI.
E) No reporting for the rental activity should be reported.